Australia business confidence improves: NAB survey

DavidRogers

SYDNEY--Australian business confidence rose in January, the first improvement in four months, while business conditions edged closer to a three-year high, a monthly business survey by National Australia Bank showed Tuesday.

NAB's business conditions index rose to +4 in January from +3 in December, while its business confidence index climbed to +8 from +6.

The survey suggests record low interest rates and a 14% fall in the Australian dollar last year have improved the economic outlook after a slowdown caused by the end of a decadelong mining investment boom.

"Now that conditions are on the rise, confidence may continue its run of surprising (post-election) resilience for a while longer," NAB Group Chief Economist Alan Oster said. "Confidence is now positive for most industries, although wholesale (a bellwether industry) and mining are both negative--significant given the increased importance of mining to the Australian economy."

Mr. Oster added that there was some upside risk to his near-term economic growth forecast, but maintained his view that the Reserve Bank of Australia will cut interest rates again late this year, as employment conditions remain weak and price inflation remains moderate.

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